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REPORT 


OF  THE 


BOARD    OF   COMMISSIONERS 


FOR    LOUISIANA 


FOR   THE 


Promotion  of  Uniform  Legislation 


IN   THE 


UNITED    STATES. 


1908 


BATON    ROUGE: 
The   Daily    State   Publishing   Company,   State   Pbintebs. 
1908. 


1658 


1659 


Promotion  of  Uniform  Legislation. 


New  Orleans,  La.,  May  25,  1908. 
To  His  Excelleitcjj,  J.  Y.  Sanders,  Governor  of  Louisiana: 

Sir  : — The  imdersigned  Commissioners  on  Uniform  State  Laws 
from  Louisiana  to  the  National  Conference  of  Commissioners, 
beg  leave  to  present  the  following  report : 

The  conference  of  1906  was  held  in  St.  Paul,  ]\Iinn.,  and  a)l 
of  the  commissioners  from  this  State  were  in  attendance,  and 
took  an  active  part  in  the  proceedings  of  the  conference. 

The  conference  in  1907  was  held  at  Portland,  Me.,  at  which 
only  one  of  the  commissioners  was  present,  the  others  being 
unavoidably  detained. 

At  the  last  conference  ^Iv.  W.  0.  Hart,  one  of  the  commis- 
sioners, Avas  unanimously  elected  vice  president  of  the  confer- 
ence, an  honor  which  had  before  been  bestowed  on  him  at  the 
conference  of  1903,  and  as  vice  president,  he  becomes  a  member 
of  the  executive  committee.     For  the  last  two  years  he  has  been 
a  member  of  the  committee  on  the  appointment  of  new  commis- 
sioners,  and  through  his  efforts,  six  States  were  represented 
for  the  first  time  at  the  conference  of  1906,  and  one  at  the  con- 
ference of  1907.     Since  then  he  has  secured  the  appointment  of 
commissioners  from  the  States  of  Missouri,'  Tennessee  and  Texas, 
and  the  Territories  of  Ncav  INIexico  and  Alaska.    He  is  also  chair- 
man of  the  Committee  on  Wills.  Descent,  and  Distribution,  and 
of  the  Committee  on  the  Torrens  System  of  Land  Registration, 
and  is  also  member  of  the  Committee  on  Commercial  Law,  which 
is  the  most   important   committee   of  the  'conference.     Of  the 
other  commissioners  from  this  State.     ^Ir.Keman  is  a  member 
of  the  Committee  on  Banks  and  Banking,  and  INTr.  Thornton  is  a 
member  of  the  Committee  on  Purity  of  Articles  of  Commerce.  All 
of  the  commissioners  expect  to  attend  the  next  conference  which 
will  be  held  at  Seattle.  Washington,  beginning  August,  21st 
1908. 

At  the  conference  of  1906  the  draft  of  an  act  to  make  uniform 
the  Law  of  Sales  of  Personal  Property,  and  the  draft  of  an  act 
making  uniform  the  Law  of  Warehouse  Receipts,  were  finally  com- 

767R68 


1660 


pleted  and  recommended  for  passage  by  the  conference  to  the 
various  States.  As  to  the  Sales  Law,  it  would  so  revolutionize  the 
laws  and  jurisprudence  of  this  State,  that  your  commissioners 
do  not  feel  that  they  should  recommend  it  for  passage,  but  the 
Uniform  Warehouse  act  should  be  the  law  of  this  State.  It  has 
already  been  adopted  by  the  States  of  Iowa,  New  Jersey, 
Illinois,  Massachusetts,  Connecticut,  Virginia,  ]\Iaryland,  Rhode 
Island,  Ohio  and  New  York,  has  been  recommended  to  Congress 
by  the  Commissioners  of  the  District  of  Columbia  and  has  been 
passed  by  the  Senate.  The  report  of  the  Senate  Committee  is  as 
follows : 

"The  Committee  on  the  District  of  Columbia,  to 
whom  was  referred  the  bill  (S.  1474)  to  make  uniform 
fhe  law  of  warehouse  receipts  in  the  District  of  Colimi- 
bia,  beg  leave  to  report  the  same  with  the  recommenda- 
tion that  it  do  pass. 

"The  committee  are  informed  that  this  bill  was  be- 
fore the  conference  of  Commissioners  on  Uniform  State 
Laws,  for  whom  it  was  drafted  by  Professor  Williston, 
of  Harvard  law  school,  for  three  years,  and  had  the  most 
careful  consideration  of  that  body  before  its  adoption. 
After  its  adoption  and  recommendation  by  the  confer- 
ence in  August,  1906,  it  was  favorably  passed  upon  by 
the  American  Bar  Association,  the  American  Bankers* 
Association,  and  the  American  Warehouseman 's  Associa- 
tion, by  a  large  number  of  chambers  of  commerce  and 
boards  of  trade,  and  it  has  also  been  enacted  into  law 
in  six  important  commercial  States,  namely.  New  York, 
Illinois,  Massachusetts,  New  Jersey,  Connecticut,  and 
Iowa.  As  indicating  the  importance  of  the  measure,  it 
was  stated  that  warehoused  goods,  consisting  of  the 
products  of  farms,  mines,  and  manufactories,  to  the 
estimated  value  of  $300,000,000  are  constantly  in  the 
warehouses  of  the  country,  and  that  this  measure  will 
make  the  warehouse  receipts  issued  for  these  values  an 
excellent  medium  of  exchange,  and  that  the  legislation 
will  thus  become  an  important  factor  in  the  commerce  of 
the  country. 

"The  passage  of  this  measure  is  recommended  by  the    . 
Commissioners  of  the  District  of  Columbia,  in  a  letter 
of  which  the  following  is  a  copy: 


1661 


''  'Office  Commissioners  of  the  District  of  Columbia, 

"  'Washington,  December  6,  1907. 
"  'Sir: — The  Commissioners  of  the  District  of  Columbia 
have  the  honor  to  transmit  herewith  drafts  of  "A  bill  to 
make  uniform  the  law  of  warehouse  receipts  in  the  Dis- 
trict of  Columbia,"  and  of  "A  bill  to  make  uniform  the 
law  of  sales  in  the  District  of  Columbia,"  and  recommend 
their  enactment. 

"  'The  drafts  of  these  bills  were  prepared  under  the 
supervision  of  the  conference  of  Commissioners  on  Uniform 
State  Laws,  which  is  composed  of  commissioners  from  sev- 
eral States  and  three  from  the  District  of  Columbia. 

"  'The  Commissioners  also  transmit  herewith  printed 
copies  of  the  drafts  of  these  bills,  as  submitted  by  the  Com- 
missioners on  Uniform  State  Laws,  which  contain  the  text 
of  the  bills  as  transmitted,  and  annotations  appurtenant 
thereto. 

"  'Very  respectfully, 

"  'Henry  B.  F.  ]\L\cfarland, 
'  'President  Board  of  Commissioners  District  of  Columhia. 
Hon.  J.  H.  Gallinger, 
"  'Chairman  Senate  Committee  on  the  District  of  Columbia.'  " 
There  is  no  doubt  that  the  law  will  be  adopted  by  many  other 
States  next  year,  when  most  of  them  will  hold  their  legislative 
sessions.     The  act  was  under  consideration   by  the  conference 
for  several  years,  was  referred  back  to  the  committee  on  com- 
mercial law  several  times,  discussed  before  the  committee  with 
the    assistance    of    Prof.    Samuel   Williston    of    Harvard,    who 
drafted  same,  and  was  discussed  by  factors,  warehousemen,  law- 
yers   and    commercial    men    generally    throughout    the  United 
States.     The  act,  with  notes  to  some  of  the  important  sections 
as  published  by  the  Committee  on  Commercial  Law,  reads  as 
follows : 


<  i  i 


1662 


IM^AFT  OF  AX  ACT  TO  :\IAKE  UNIFORM  THE  LAW  OF 
WAREHOUSE  RECEIPTS. 

{Approved  in  final  form.) 
Be  it  enacted,  etc.,  as  follows : 


PART    I. 

The  Issue  of  Warehouse  Receipts. 

Section  1. —  [Persons  ^Vlio  may  Issue  Receipts.]  Warehouse 
receipts  may  be  issued  by  any  warehouseman. 

(This  should  be  read  in  connection  with  the  definition  of  ware- 
houseman in  section  58.  On  account  of  varying  local  conditions 
and  laws  it  seemed  impracticable  in  an  act  intended  to  be  passed 
in  many  States  to  fix  limits  as  to  who  might  carry  on  the  busi- 
ness of  warehousing.) 

Sec.  2. —  [Form  of  Receipts.  Essential  Terms.]  Warehouse 
receipts  need  not  be  in  any  particular  form,  but  every  such  re- 
ceipt must  embody  within  its  written  or  printed  terms— 

(a.)   The  location  of  the  warehouse  where  the  goods  are  stored. 

(6.)   The  date  of  issue  of  the  receipt, 

(c.)    The  consecutive  number  of  the  receipt, 

{d.)  A  statement  whether  the  goods  received  will  be  delivered 
to  the  bearer,  to  a  specified  person  or  to  a  specified  person  or 
his  order, 

(c.)   The  rate  of  storage  charges, 

(/.)  A  description  of  the  goods  or  of  the  packages  containing 
them. 

ig.)  The  signature  of  the  warehouseman,  which  may  be  made 
by  his  authorized  agent, 

(//.)  If  the  receipt  is  issued  for  goods  of  which  the  ware- 
houseman is  owTier,  either  solely  or  jointly  or  in  common  with 
others,  the  fact  of  such  ownership,  and 

(/.)  A  statement  of  the  amount  of  advances  made  and  of 
liabilities  incurred  for  which  the  warehohaseman  claims  a  lien. 
If  the  precise  amount  of  such  advances  made  or  of  such  liabil- 
ities incurred  is,  at  the  time  of  the .  issue  of  the  receipt,  un- 
known to  the  wareliouseman  or  to  his  agent  who  issues  it,  a 
statement  of  the  fact  that  advances  have  been  made  or  liabilities 
incurred  and  the  purpose  thereof  is  sufficient. 

A  warehouseman  shall  be  liable  to  any  person  injured  thereby 


1663 


for  all  damage  caused  by  the  omission  from  a  negotiable  re- 
ceipt of  any  of  the  terms  herein  required. 

(This  section  is  in  accordance  with  business  custom  except 
(h)  and  (i).  As  some  abuses  have  arisen  from  warehousemen 
issuing  receipts  on  their  own  goods,  it  seemed  wise  that  when 
they  issued  negotiable  receipts  in  this  way,  the  document  should 
carry  notice  of  the  fact  on  its  face.  See  Section  53  in  this 
connection.  It  is  obvious  also  that  negotiable  receipts  should 
show  on  their  face  what  charges  are  claimed  against  the  goods. 
See  further  as  to  this  Section  30. 

Though  it  is  desired  that  all  warehouse  receipts  shall  conform 
to  the  rules  here  laid  down,  the  essential  thing  is  that  negotiable 
receipts  shall  do  so,  and  as  to  them  only  is  a  sanction  imposed 
for  failing  to  insert  the  statutory  terms. 

Sec.  3. —  [Form  of  Receipts.  What  Terms  may  be  Inserted.'] 
A  warehouseman  may  insert  in  a  receipt,  issued  by  him,  any 
other  terms  and  conditions,  provided  that  such  terms  and  con- 
ditions shall  not — 

{a.)   Be  'contrary  to  the  provisions  of  this  act. 

(&.)  In  any  wise  impair  his  obligation  to  exercise  that  degree 
of  care  in  the  safe-keeping  of  the  goods  entrusted  to  him  which 
a  reasonably  careful  man  would  exercise  in  regard  to  similar 
goods  of  his  own. 

(Public  policy  demands  that  in  the  case  of  warehousemen,  as 
well  as  in  the  case  of  carriers,  where  the  question  has  more  often 
arisen,  a  contract  to  be  freed  from  the  consequences  of  negli- 
gence should  not  be  allowed.  See  Schouler  on  Bailments  (1905), 
§§  36,  362  et  seq.) 

Sec.  4. —  [Definition   of  Non-Negotiable  Receipt.]     A  receipt 
in  which  it  is  stated  that  the  goods  received  will  be  delivered  to 
"the  depositor  or  to  any  other  specified  person  is  a  non-negoti«''Ie  . 
receipt. 

fSee  note  to  the  following  section.) 

S5ec.  5.— [Definition  of  Negotiate  Receipt.]  A  receipt  in 
which  it  is  stated  that  the  goods  received  will  be  delivered  to 
the  bearer  or  to  the  order  of  any  person  named  in  such  receipt 
is  a  negotiable  receipt. 

Xo  provision  shall  be  inserted  in  a  negotiable  receipt  that  it 
is  non-negotiable.     Such  provision,  if  inserted,  shall  be  void. 

(This  draft  makes  a  fundamental  distinction  throughout  be- 
tween negotiable  and  non-negotiable  receipts.     The  former  is 


1664 

"s 

the  negotiable  representative  of  the  goods,  the  latter  is  merely 
evidence  of  an  ordinary  contract  of  bailment.  This  distinction 
accords  with  mercantile  usage,  and  though  in  many  places  the 
law  is  not  clear,  the  prevailing  legal  understanding  agrees  with 
the  mercantile  usage.    Hallgarten  vs.  Oldham,  135  ]\Iass.  1.) 

Sec.  6. —  [Duplicate  Receipts  must  be  so  Marked.]  When 
more  than  one  negotiable  receipt  is  issued  for  the  same  goods 
the  word  "duplicate"  shall  be  plainly  placed  upon  the  face 
of  every  such  receipt  except  the  one  first  issued.  A  warehouse- 
man shall  be  liable  for  all  damage  caused  by  his  failure  so  to 
do  to  anyone  who  purchased  the  subsequent  receipt  for  value 
supposing  it  t-o  be  an  original,  even  though  the  purchase  be 
after  the  delivery  of  the  goods  by  the  warehouseman  to  the 
holder  of  the  original  receipt. 

(It  is  the  practice  of  most  if  not  all  careful  warehousemen 
not  to  issue  duplicate  negotiable  receipts  at  all,  and  such  issues 
are  to  be  discouraged,  but  following  a  large  number  of  statutes 
already  existing,  this  act  instead  of  forbidding  the  practice  alto- 
gether safeguards  it  by  requiring  the  receipt  to  be  plainly 
marked. ) 

Sec.  7. —  [Failure  to  Mark  ''Not  Negotiable."]  A  non-ne- 
gotiable receipt  shall  have  plainly  placed  upon  its  face  by  the 
warehouseman  issuing  it  "non-negotiable"  or  "not  negotiable." 
In  case  of  the  warehouseman's  failure  so  to  do,  a  holder  of  the 
receipt  who  purchased  it  for  value  supposing  it  to  be  negotiable, 
may,  at  his  option,  treat  such  receipt  as  imposing  upon  the 
warehouseman  the  same  liabilities  he  would  have  incurred  had 
the  receipt  been  negotiable. 

This  section  shall  not  apply,  however,  to  letters,  memoranda 
or  written  acknowledgments  of  an  informal  eharactei*. 

(This  section,  like  the  preceding,  is  aimed  at  obvious  frauds.* 
Both  follow  much  existing  legislation.  See  passages  in  Mohun 
on  AVarehouscmen.  indexed  at  pages  943,  944.) 


y  1665 

PART    II. 

Obligations    and    Rights    of    Warehoi'semen    Upon    Their 

Receipts. 

Sec.  8. —  [Obligation  of  Warehousemau  to  Deliver.]  A  ware- 
houseman, in  the  absence  of  some  lawful  excuse  provided  by  this 
■act,  is  bound  to  deliver  the  goods  upon  a  demand  made  either 
by  the  holder  of  a  receipt  for  the  goods  or  by  the  depositor,  if 
such  demand  is  accompanied  with — 

(a.)  An  offer  to  satisfy  the  warehouseman's  lien, 

(&.)  An  offer  to  surrender  '(he  receipt  if  negotiable,  with  such 
indorsements  as  would  be  necessary  for  the  negotiation  of  the 
receipt,  and 

(c.)  A  readiness  and  willingness  to  sign,  when  the  goods  are 
delivered,  an  acknowledgment  that  they  have  been  delivered, 
if  such  signature  is  requested  by  the  warehouseman. 

In  case  the  warehouseman  refuses  or  fails  to  deliver  the  goods 
in  compliance  with  a  demand  by  the  holder  or  depositor  so  ac- 
companied, the  burden  shall  be  upon  the  warehouseman  to  estab- 
lish the  existence  of  a  lawful  excuse  for  such  refusal. 

(See  the  definition  of  "holder"  in  Section 58.  The  require- 
ment of  signing  an  acknowledgment  that  the  goods  have  wt-cu 
received  is  in  accordance  with  universal  business  usage,  'though 
it  is  doubtful  if  the  usage  has  been  supported  by  law.  As  th.^ 
usage  is  reasonable,  it  is  adopted  as  the  rule  of  this  act.  The 
burden  imposed  on  the  warehouseman  in  the  last  paragraph 
agrees  with  existing  law.  Burnell  vs.  X.  Y.  C.  R.  R.  Co.,  -15 
N.  Y.  184.) 

Sec.  9. —  [Justification  of  Warehousomax  in  Delivering.]  A 
warehouseman  is  justified  in  delivering  the  goods,  subject  to  the 
provisions  of  the  three  following  sections,  to  one  who  is — 

(a.)  The  person  lawfully  entitled  to  the  posstssion  of  the 
goods,  or  his  agent, 

(&.)  A  person  who  is  either  himself  entitled  to  delivery  by  tlie 
terms  of  a  non-negotiable  receipt  issued  for  the  goods,  or  who 
has  written  authority  from  the  person  so  entitled  either  in- 
dorsed upon  the  receipt  or  written  upon  another  paper,  or 

(c.)  A  person  in  possession  of  a  negotiable  receipt  by  the 
terms  of  which  the  goods  are  deliverable  to  him  or  order  or  to 
hearer,  or  which  has  been  indorsed  to  him  or  in  blank  by  the 


1666 


10 


person  to  ■whom  delivery  was  promised  by  the  terms  of  the  re- 
ceipt or  by  his  mediate  or  immediate  indorsee. 

(This  section  gives  the  warehouseman  a  justification  in  some 
eases  Avhere  he  would  not  under  the  preceding  section  be  bound 
to  deliver,  e.  g.    If  a  thief  presented  a  negotiable  receipt  prop-* 
erly  indorsed,  the  warehouseman  would  be  protected  if  he  de- 
livered the  goods  innocently.) 

Sec.  10. —  [Warehouse nmn's  Liability  for  Misdelivery.]  Where 
a  warehouseman  delivers  the  goods  to  one  who  is  not  in  fact 
lawfully  entitled  to  the  possession  of  them,  the  warehouseman 
shall  be  liable  as  for  conversion  to  all  having  a  right  of  prop- 
erty or  possession  in  the  goods  if  he  delivered  the  goods  other- 
wise than  as  authorized  by  sub-divisions  (h)  and  (c)  of  the  pre- 
ceding section,  and  though  he  delivered  the  goods  as  authorized 
by  said  sub-divisions  he  shall  be  so  liable,  if  prior  to  such  de- 
liver\'  he  had  either 

(a.)  Been  requested,  by  or  on  behalf  of  the  person  lawfully 
entitled  to  a  right  of  property  or  possession  in  the  goods,  not  to 
make  such  delivery,  or 

(&.)  Had  information  that  the  delivery  about  to  be  made  was 
to  one  not  lawfully  entitled  to  xhe  possession  of  the  goods. 

(This  is  believed  to  represent  the  law.  See  Schouler  (1905), 
§§  44.  45:  Velsian  vs.  Lewis,  15  Oreg.  539.) 

Sec.  11.— \yegotiahle  Beceipts  mu.<it  he  Cancelled  u'hen  Goods 
Delivered.]  Except  as  provided  in  Section  36,  where  a  ware- 
houseman delivers  goods  for  which  he  had  issued  a  negotiable 
receipt,  the  negotiation  of  which  would  transfer  the  right  to 
the  possession  of  the  goods,  and  fails  to  take  up  and  cancel 
the  receipt,  he  shall  be  liable  to  anyone  who  purchases  for 
value  in  good  faith  such  receipt,  for  failure  to  deliver  the 
goods  to  him,  whether  such  purchaser  acquired  title  to  the  re- 
ceipt before  or  after  the  delivery  of  the  goods  by  the  ware- 
houseman. 

(It  is  an  obvious  requirement  of  the  mercantile  use  of  nego- 
tiable receipts  that  the  goods  shall  remain  in  the  warehouse  as 
long  as  the  receipt  is  outstanding,  and  statutes  similar  in  effect 
to  this  section  are  in  force  in  some  States.  Mohun,  2.  24,  355, 
382.  538,  593. 

The  section  does  not  apply  to  non-negotiable  receipts,  because 
usage  and  mercantile  necessity  frequently  require  delivery  in 
such  eases  without  surrender  of  the  receipt.) 


n 


1667 


Sec.  12.— [X  eg  of  iable  Receipts  must  be  Cancelled  or  Marked 
when  Part  of  Goods  Delivered.]  Except  as  provided  in  Section 
36,  where  a  warehousem-an  delivers  part  of  the  goods  for  which 
he  had  issued  a  negotiable  receipt  and  fails  either  to  take  up 
and  cancel  such  receipt,  or  to  place  plainly  upon  it  a  statement 
of  what  goods  or  packages  have  been  delivered,  he  shall  be  liable 
to  anyone  who  purchases  for  value  in  good  faith  such  receipt, 
for  failure  to  deliver  all  the  goods  specified  in  the  receipt,  whether 
such  purchaser  acquired  title  to  the  receipt  before  or  after  the 
delivery  of  any  portion  of  the  goods  by  the  warehouseman. 

This  section  follows  as  to  partial  deliveries  the  rule  of  the 
preceding. 

Sec.  13. —  [Altered  Receipts.]  The  alteration  of  a  receipt 
shall  not  excuse  the  warehouseman  who  issued  it  from  any 
liability  if  such  alteration  was 

(a.)   Immaterial, 

(&.)   Authorized,  or 

(c.)   >\rade  w^ithout  fraudulent  intent. 

If  the  alteration  was  authorized,  the  warehouseman  shau  oe 
liable  according  to  the  terms  of  the  receipt  as  altered.  If  the 
alteration  was  unauthorized,  but  made  without  fraudulent  in- 
tent, the  warehouseman  shall  be  liable  according;  to  the  terms 
of  the  receipt,  as  they  were  before  alteration. 

^Material  and  fraudulent  alteration  of  a  receipt  shall  not  ex- 
cuse the  wareho'iseman  who  issued  it  from  liaiblity  to  deliver 
aecordingf  to  the  terms  of  the  receipt  as  ori'iinally  issued,  the 
goods  for  which  it  was  issued,  but  shall  excuse  him  from  any 
other  liability  to  the  person  who  made  the  alteration  and  to  any 
person  who  took  with  notice  of  the  alteration.  Any  purchaser 
of  the  receipt  for  value  without  notice  of  the  alteration  shall 
acquire  the  same  rights  against  the  warehouseman  which  such 
purchaser  would  have  acquired  if  the  receipt  had  not  been 
altered  at  the  time  of  the  purchase. 

(This  section  adopts  the  prevailing  rule  of  the  connnon  law. 
Even  fraudulent  alteration  cannot  divest  the  title  of  the  owner 
of  stored  goods  and  the  warehouseman  is  therefore  liable  to 
redeliver  them  to  the  owner.) 

Sec.  14:.— \Lost  or  Destroyed  Receipts.]  Where  a  negotiable 
receipt  has  been  lost  or  destroyed,  a  court  of  competent  juris- 
dietion  may  order  the  delivery  of  the  goods  upon  satisfactory 
proof   of  such   loss   or  destruction   and   upon   the   giving  of  a 


1668  J, 


bond  with  sufficient  sureties  to  be  approved  by  the  court  to 
protect  the  warehouseman  from  any  liability  or  expense,  which 
he  or  any  person  injured  by  sucli  delivfry  may  incur  by  reason 
/of  the  original  receipt  remaining  outstanding.  The  court  may 
also  in  its  discretion  order  the  payment  of  the  warehouseman's 
reasonable  cost  and  counsel  fees. 

The  delivery  of  the  goods  under  an  order  of  the  court,  as 
provided  in  this  section,  shall  not  relieve  the  warehouseman 
froiA  liability  to  a  person  to  whom  the  negotiable  receipt  has 
been  or  shall  be  negotiated  for  value  without  notice  of  the 
•proceedings  or  of  the  delivery  of  the  goods. 

(As  it  is  for  obvious  reasons  forbidden  and  indeed  made  a 
criminal  offense  (Section  52)  to  issue  an  additional  negotiable 
receipt,  it  is  evident  that  great  care  must  be  used  in  permitting 
such  an  issue,  or  what  is  the  same  thing,  the  redeliver^-  of  the 
poods  without  the  surrender  of  the  original  receipt.  It  is  not 
enough  that  the  parties  agree  that  the  goods  shall  be  given  up 
or  a  new  receipt  issued.  It  is  essential  that  a  court  shall  pass 
upon  the  question  and  make  sure  that  the  original  is  lost  or 
destroyed  and  that  a  proper  indemnity  is  taken,  for  the  rights 
of  possible  innocent  purchasers  of  the  original  receipt  are  in- 
volved. ) 

Sec.  15.—  [Effect  of  Duplicate  Receipts.]  A  receipt  upon  the 
face  of  which  the  word  "duplicate"  is  plainly  placed  is  a  rep- 
i  isentation  and  warranty  by  the  warehouseman  that  such  re- 
ceipt is  an  accurate  copy  of  an  original  receipt  properly  issued 
and  uncancelled  at  the  date  of  the  issue  of  the  duplicate,  but 
shall  impose  upon  him  no  other  liability. 

(See  not  to  Section  6.) 

Sec.  16. —  [Warehouseman  cannot  set  up  Title  in  Himself. \ 
No  title  or  rieht  to  the  possession  of  the  goods,  on  the  part  of 
the  warehouseman,  unless  such  title  or  right  is  derived  direetly 
or  indirectly  from  a  transfer  made  by  the  depositor  at  the  time 
Vof  or  subsequent  to  the  deposit  for  storage,  or  from  the  ware- 
houseman's lien,  shall  excuse  the  warehouseman  from  liability 
for  refusing  to  deliver  the  goods  according  to  the  terms  of  the 
receipt. 

(This  states  the  common  law.  3  Am.  &  Eng.  Encyc.  of  Law, 
759.) 

Sec.  17. —  [Interpleader  of  Adverse  Claimants.]  If  more 
than  one  Derson  claim  the  title  or  nossession  of  the  goods,  the 


1669 


I'd 


warehouseman  may,  either  as  a  defense  to  an  action  brought 
against  him  for  non-delivery  of  the  goods,  or  as  an  original 
suit,  whichever  is  appropriate,  require  all  known  claimants  to 
interplead. 

(The  case  of  Crawshay  vs.  Thornton,  2  Myl.  &  C.  1,  unfor- 
tunately held  that  interpleader  was  not  a  proper  remedy  in 
such  a  case.  It  is,  however,  the  only  adequate  remedy  and 
is  probably  generally  allowed  in  this  country.  3  Am.  &  Eng. 
Encyl.  of  Law,  762.) 

Sec.  18. —  [Warehouseman  has  Reasanahle  Time  to  Determine 
Validity  of  Claims.]  If  some  one  other  than  the  depositor  or 
person  claiming  under  him  has  a  claim  to  the  title  or  possession 
of  the  goods,  and  the  warehouseman  has  information  of  such 
claim,  the  warehouseman  shall  be  excused  from  liability  for 
refusing  to  deliver  the  goods,  either  to  the  depositor  or  person 
claiming  under  him  or  to  the  adverse  claimant,  until  the  ware- 
houseman has  had  a  reasonable  time  to  ascertain  the  validity 
•of  the  adverse  claim  or  to  bring  legal  proceedings  to  compel  all 
claimants  to  interplead. 

It  seems  obviously  proper  that  the  warehouseman  should  be 
protected  for  such  brief  period  as  may  be  necessary  to  enable 
him  to  determine  the  rights  of  the  claimants. 

Sec.  19. —  [Adverse  Title  is  no  Defense,  except  as  above  Pro- 
vided.] Except  as  provided  in  the  tM'o  preceding  sections  and 
in  Sections  9  and  36,  no  right  or  title  of  a  third  person  shall 
be  a  defense  to  an  action  brought  by  the  depositor  or  person 
claiming  under  him  against  the  warehouseman  for  failure  to 
deliver  the  goods  according  to  the  terms  of  the  receipt. 

(Except  as  qualified  by  the  preceding  sections,  the  common 
law  doctrine  is  here  stated  that  a  bailee  cannot  set  up  the 
title  of  a  third  person  as  an  excuse  for  failure  to  deliver  goods. 
See  3  Am.  &  Eng.  Encyc,  758.) 

Sec.  20. —  [Liahility  for  Nor-E.Tistence  or  Misdescription  of 
Goods.]  A  warehouseman  shall  be  liable  to  the  holder  of  a  re- 
ceipt for  damasres  caused  by  the  non-existence  of  the  goods  or  by 
the  failure  of  the  goods  to  correspond  with  the  description  there- 
of in  the  receipt  at  the  time  of  its  issue.  If,  however,  the  goods 
are  described  in  a  receipt  merely  by  a  statement  of  marks  or 
labels  upon  them,  or  upon  packages  containing  them,  or  by  a 
statement  that  the  goods  are  said  to  be  eroods  of  a  certain  kind, 
or  that  packages  containing  the  goods  are  said  to  contain  goods 


1670 

14 

of  a  certain  kinil.  or  by  words  of  like  purport,  such  statements, 
if  true,  shall  not  make  lial)le  tlie  warehouseman  issuing  the  re- 
ceii)t,  although  the  u,t)ods  are  not  of  the  kind  which  the  marks  or 
labels  upon  them  indicate,  or  of  the  kind  they  were  said  to  be  by 
the  depositor. 

(This  section  imposes  on  the  warehouseman  a  stricter  rule 
than  that  generally  in  force  in  this  country  in  that  it  makes  a 
w'arehoiiseman  liable  for  an  innocent  misdescription  of  the 
goods.  See  Hale  vs.  ^filwaukee  Dock  Co.,  23  Wis.  276 ;  but 
as  the  warehouseman  can  readily  protect  himself  by  inserting 
in  the  receipt  only  ^\•hat  he  knows,  namely,  the  marks  on  the 
goods  or  the  statements  of  the  depositor  regarding  them,  it 
seems  best  to  make  the  warehouseman  responsil)le  for  wiiat  he 
asserts. ) 

Sec.  21. —  [Liability  for  Care  of  Goods.]  A  warehouseman 
shall  be  liable  for  any  loss  or  injury  to  the  goods  caused  by 
his  failure  to  exercise  such  care  in  regard  to  them  as  a  reason- 
ably careful  ow-ner  of  similar  goods  w^ould  exercise,  but  he  shall 
not  be  liable,  in  the  absence  of  an  agreement  to  the  contrary 
for  any  loss  or  injury  to  the  goods  which  could  not  have  been 
avoided  by  the  exercise  of  such  care. 

(This  states  the  common  law.    3  Am.  &  Eng.  Encyc,  750.) 

Sec.  22. —  [Goods  must  he  Kept  Separate.]  Except  as  pro- 
vided in  the  following  section,  a  warehouseman  shall  keep  the 
goods  so  far  separate  from  goods  of  other  depositors,  and  from 
other  goods  of  the  same  depositor  for  which  a  separate  receipt 
has  been  issued,  as  to  permit  at  all  times  the  identification  and 
redelivery  of  the  goods  deposited. 

(As  to  most  merchandise,  of  course,  the  warehouseman's  duty 
is  to  keep  the  goods  of  each  depositor  separate.  The  following 
section  provides  for  the  exception  to  the  rule.) 

Sec.  23. —  [Fungible  Goods  may  he  Commingled,  if  Ware- 
houseman Authorized.]  If  authorized  by  agreement  or  by  cus- 
tom, a  warehouseman  may  mingle  fungible  goods  with  other 
goods  of  the  same  kind  and  grade.  In  such  case  the  various 
depositors  of  the  mingled  goods  shall  own  the  entire  mass  in 
common,  and  each  depositor  shall  be  entitled  to  such  portion 
thereof  as  the  amount  deposited  by  him  bears  to  the  whole. 

(An  exceptional  rule  prevails  in  this  country  by  custom  as 
to  grain  and  similar  merchandise.  See  definition  of  ''fungible" 
in  Section  58.) 


1671 

15 

Sec.  24. —  [Liability  of  Warchousema)i  to  Depositors  of  Com- 
mingled Goads.]  The  warehouseman  shall  be  severally  liable 
•to  each  depositor  for  the  care  and  redelivery  of  his  share  of 
such  mass  to  the  same  extent  and  under  the  same  circumstauws 
as  if  the  goods  had  been  ke{)t  separate. 

(This  section  and  the  two  preceding  sections  state  the  general 
American  law.) 

Sec.  25. —  [Attachment  or  Levy  upon  Goods  for  which  a 
Negotiable  Beceipt  lias  been  Issued.]  If  goods  are  delivered 
to  a  warehouseman  by  the  owner  or  by  a  person  whose  act  in 
conveying  the  title  to  them  to  a  purchaser  in  good  faith  for 
value  would  bind  the  owner,  and  a  negotiable  receipt  is  issued 
for  them,  they  cannot  thereafter,  while  in  the  possession  of  the 
warehouseman,  be  attached  by  garnishment  or  otnerwise,  or 
be  levied  upon  under  an- execution,  unless  the  receipt  be  first 
surrendered  to  the  warehouseman,  or  its  negotiation  enjoined 
The  warehouseman  shall  in  no*  ease  be  compelled  to  deliver  up 
the  actual  possession  of  the  goods  until  the  receipt  is  surren- 
dered to  him  or  impounded  by  the  court. 

(If  the  mercantile  theory  of  documents  of  title,  such  as  bills 
of  lading  and  warehouse  receipts,  were  carried  to  its  logical 
extent,  no  attachment  of  the  goods  represented  by  the  docu- 
ment or  levy  upon  them  could  be  permitted  while  the  negotiable 
document  was  outstanding.  For  the  mercantile  theory  pro- 
ceeds upon  the  assumption  that  a  negotiable  document  of  title 
represents  the  goods  and  may  be  safely  dealt  with  on  that  as- 
sumption. For  one  and  the  same  reason  it  is  not  admissible 
for  the  bailee  to  deliver  the  goods  without  taking  up  an  out- 
standing negotiable  receipt  for  them,  and  for  the  law  to  allow 
attachment  or  levy  upon  the  goods,  regardless  of  outstanding 
negotiable  documents.  For  a  similar  reason  the  maker  of 
negotiable  notes  is  protected  by  garnishment;  in  most  States 
by  absolutely  disallowing  such  garnishment  and  in  other  States 
by  making  any  garnishment  subject  to  the  rights  of  even  a 
subsequent  purchaser  for  value  before  maturity  of  the  paper. 

Likewise  by  statute  in  some  States  an  attachhment  of  stock  is 
postponed  to  a  subsequeilt  purchaser  of  the  stock  certificate 
Clews  vs.  Friedman,  180  Mass.  556.  So  in  the  case  of  carriers 
some  protection  against  garnishment  has  been  given.  In  most 
States,  if  the  goods  are  actually  in  transit  the  carrier  cannot 
be  garnished,  14  Am.  &  Eng.  Encyc.  of  Law,  810.     A  transfer 


167 


o 


16 


of   the   bill   of   ladins;-   prevails   over   a  subsequent   attachment 
Mather  rs.  Gordon,  59  At.  Rep.  424  (Conn.):  Robert  C.  White- 
Co.  vs.  Chicago  &  C.  R.  Co.,  87  Mo.  App.  330;  Union  Bank  vs 
Rowan,  23  S.  C.  339;  and  in  Peters  vs.  Elliott,  78  111.  321,  it  was. 
held  that  an  attaching  creditor  of  a  consignor  was  postponed  to- 
one  Avho  bought  the  bill  of  lading  subsequently. 

It  Avas  thought  best  in  this  draft  not  to  take  the  extreme 
position  that  no  attachment,  garnishment  or  levy  could  be  made- 
on  property  for  M'hich  a  negotiable  receipt  was  outstanding, 
but  to  cover  the  essential  practical  point  by  making  it  a  condi- 
tion of  the  validity  of  such  seizure  that  the  negotiation  of  the 
receipt  be  enjoined  or  the  document  impounded.  The  follow- 
ing section  expressly  gives  the  court  full  power  to  aid,  by  in- 
junction and  otherwise,  a  creditor  seeking  to  get  at  a  negotiable- 
receipt  and  the  property  covered  thereby.) 

Sec.  26. —  [Creditors'  Reniedics  to  Reach  Negotiable  Receipts.] 
A  creditor  whose  debtor  is  the  owner  of  a  negotiable  receipt 
shall  be  entitled  to  such  aid  from  courts  of  appropriate  jurisdic- 
tion, by  injunction  and  otherwise,  in  attaching  such  receipt  or 
in  satisfying  the  claim  by  means  thereof  as  is  allowed  at  law 
or  in  equity,  in  regard  to  property  which  cannot  readily  be 
attached  or  levied  upon  by  ordinary  legal  process. 

(This  section  is  to  enable  the  court  to  give  the  fullest  relief 
possible  in  making  the  negotiable  receipt  available  to  the 
creditor  since  the  goods  cannot  otherwise  be  taken  from  the 
warehouseman 's  possession. ) 

Sec.  27. —  {What  Claims  are  Included  in  the  Warehouseman's- 
Lie)i.]  Subject  to  the  provisions  of  Section  30.  a  warehouse- 
man shall  have  a  lien  on  goods  deposited  or  on  the  pro-eeds 
thereof  in  his  hands,  for  all  lawful  charges  for  storage  and 
preservation  of  the  goods ;  also  for  all  lawful  claims  for  money 
advanced,  interest,  insurance,  transportation,  labor,  wei^fhing, 
coopering  and  other  charges  and  expenses  in  relation  to  such 
goods;  also  for  all  reasonable  charges  and  expenses  for  notice, 
and  advertisements  of  sale,  and  for  sale  of  the  goods  where  de- 
fault has  been  made  in  satisfying  the  warehouseman's  lien. 

(This  extends  the  common  law.  but  has  the  precedent  of  other 
.statutes,  see  Mohun,  37,  86,  124,  203,  215,  352,  546,  553,  706,  772" 
801.  833.) 


1673 


I  I 


Sec.  28. —  [Against  what  Property  the  Lien  may  be  Enforced.], 
Subject  to  the  provisions  of  Section  30  a  warehouseman's  lien 
may  be  enforced — 

(a)  Against  all  goods,  whenever  deposited,  belonging  tothe 
person  who  is  liable  as  debtor  for  the  claims  in  regard  to  which 
the  lien  is  asserted,  and 

(6)  Against  all  goods  belonging  to  others  which  have  been 
deposited  at  any  time  by  the  person  who  is  liable  as  debtor  for 
the  claims  in  regard  to  which  the  lien  is  asserted,  if  such  per- 
son had  been  so  entrusted  with  the  possession  of  the  goods  that 
a  pledge  of  the  same  by  liim  at  the  time  of  the  deposit  to  one 
who  took  the  goods  in  good  faith  for  value  would  have  been 
valid. 

Sec.  29. —  [How  the  Lien  may  be  Lost.]  A  warehouseman 
loses  his  lien  upon  goods — 

(a)     By  surrendering  possession  thereof,  or 

(&)  By.  refusing  to  deliver  the  goods  when  a  demand  is  made 
^vith  which  he  is  bound  to  comply  under  the  provisions  of  this 
act. 

This  section  merely  states  the  rule  of  the  common  law. 

Sec.  30. —  [Negotiable  Eeceipt  must  state  Charges  for  which 
Lieu  is  Claimed.]  If  a  negotiable  receipt  is  issued  for  goods,  the 
warehouseman  shall  have  no  lien  thereon,  except  for  charges  for 
storage  of  those  goods  subsequent  to  the  date  of  the  receipt,  un- 
less the  receipt  expressly  enumerates  other  charges  for  which  a 
lien  is  claimed.  In  such  case  there  shall  be  a  lien  for  the  charges 
enumerated  so  far  as  they  are  within  the  terms  of  Se-tion  27, 
although  the  amount  of  the  charges  so  enumerated  is  not  stated 
in  the  receipt. 

'.This  section  is  obviously  requisite  for  the  credit  of  negotialile- 
receipts.     See  note  to  Section  2.) 

Sec.  31. —  [Warehousemen  need  not  Deliver  uniil  Lien  is  Satis- 
fied.] A  warehouseman  having  a  lien  valid  against  the  person  de- 
ma^ulinff  the  goods  may  refuse  to  deliver  the  goods  to  him  until 
the  lien  is  satisfied. 

This  is  the  rule  of  the  common  law.) 

Sec.  32. —  [Warehonseman's  Lieu  does  not  Preclude  Other 
Remedies.^  Whether  a  warehouseman  has  or  has  not  a  lien  upon 
the  ffoods.  he  is  entitled  to  all  remedies  allowed  by  law  to  a  credi- 
tor against  his  debtor  for  the  collection   from   the  depositor  of 


1674 


J8 


all  charges  and  advances  which  the  depositor  has  expressly  or 
impliedly  contracted  with  the  warehouseman  to  pay. 

(This  section  also  only  restates  the  common  law.) 

Sec.  33. —  [Satisfaction  of  Lien  by  Sale.]  A  warehouseman's 
lien  for  a  claim  which  has  become  due  may  be  satisfied  as  follows : 

The  warehouseman  shall  g'we  a  written  notice  to  the  person 
on  whose  account  the  goods  are  held,  and  to  any  other  person 
known  by  the  warehouseman  to  claim  an  interest  in  the  goods. 
Such  notice  shall  be  given  by  delivery'  in  person  or  by  registered 
letter  addressed  to  the  last  known  place  of  business  or  abode  of 
the  person  to  be  notified.    The  notice  shall  contain — 

(a)  An  itemized  statement  of  the  warehouseman's  claim, 
showing  the  sum  due  at  the  time  of  the  notice  and  the  date  or 
dates  when  it  became  due. 

(&)  A  brief  description  of  the  goods  against  which  the  lien 
exists. 

(c)  A  demand  that  the  amount  of  the  claim  as  stated  in  the 
notice,  and  of  such  further  claim  as  shall  accrue,  shall  be  paid 
on  or  before  a  day  mentioned,  not  less  than  ten  days  from  the 
delivery  of  the  notice  if  it  is  personally  delivered,  or  from  the 
time  when  tbe  notice  should  reach  its  destination,  according  to 
the  due  course  of  post,  if  the  notice  is  sent  by  mail,  and 

(d)  A  statement  that  unless  the  claim  is  paid  within  the  time 
specified  the  goods  will  be  advertised  for  sale  and  sold  by  auction 
at  a  specified  time  and  place. 

■  In  accordance  with  the  terms  of  a  notice  so  given,  a  sale  of 
the  goods  by  auction  may  be  had  to  satisfy  any  valid  claim  of 
the  warehouseman  for  which  he  has  a  lien  on  the  goods.  The  sale 
shall  be  had  in  the  place  where  the  lien  was  acquired,  or,  if  such 
place  is  manifestly  unsuitable  for  the  purpose,  at  the  nearest 
suitable  place.  After  the  time  for  the  pa>Tnent  of  the  claim 
specified  in  the  notice  to  the  depositor  has  elapsed,  an  advertise- 
ment of  the  sale,  describing  the  goods  to  be  sold,  and  stating  the 
name  of  the  owner  or  person  on  whose  account  the  goods  are  held, 
and  the  time  and  place  of  the  sale  shall  be  published  once  a  week 
-for  two  consecltire  weeks  in  a  newspaper  published  in  the  place 
Avhcre  such  sale  is  to  be  held.  -The  sale  shall  not  be  held  less  than 
fifteen  days  from  the  time  of  the  first  publication.  If  there  is 
no  newspaper  published  in  such  place,  the  advertisement  shall  be 
posted  at  least  ten  days  before  such  sale,  in  not  less  than  six  'eon- 
s]iicuous  places  therein. 


1675 


19 


From  the  proceeds  of  such  sale  the  warehouseman  shall  satisfy 
his  lien,  including  the  reasonable  charges  of  notice,  advertisement 
and  sale.  The  balance,  if  any,  of  such  proceeds  shall  be  held  by 
the  warehouseman,  and  delivered  on  demand  to  the  person  to 
whom  he  would  have  been  bound  to  deliver  or  justified  in  deliver- 
ing the  goods.  , 

At  any  time  before  the  goods  are  so  sold  any  person  claiming 
a  right  of  property  or  possession  therein  may  pay  the  warehouse- 
man the  amount  necessary  to  satisfy  his  lien  and  to  pay  the  rea- 
sonable expenses  and  liabilities  incurred  in  serving  notices  and 
advertising  and  preparing  for  the  sale  up  to  the  time  of  such 
payment.  The  warehouseman  shall  deliver  the  goods  to  the  per- 
son making  such  payment,  if  he  is  a  person  entitled,  under  the 
provisions  of  this  act,  to  the  possession  of  the  goods,  on  payment 
of  charges  thereon.  Otherwise  the  warehouseman  shall  retain 
possession  of  the  goods  according  to  the  terms  of  the  original  con- 
tract of  deposit. 

(This  section  is  copied,  with  slight  changes,  from  the  New  York 
law.  ^lohun,  553.) 

Sec.  34. —  [Perishable  and  Hazardous  Goods.]  If  goods  are  of 
a  perishable  nature,  or  by  keeping  will  deteriorate  greatly  in 
value,  or  by  their  odor,  leakage,  inflammability  or  explosive  na- 
ture, will  be  liable  to  injure  other  property,  the  warehouseman 
may  give  such  notici'  to  the  owner,  or  to  the  person  m  whose 
name  the  goods  are  stored,  as  is  reasonable  and  possible  under 
the  circumstances,  to  satisfy  the  lien  upon  such  goods,  and  to  re- 
move them  from  the  w^arehouse,  and  in  the  event  of  the  failure 
of  such  person  t-o  satisfy  the  lien  and  to  remove  the  goods  within 
the  time  so  specified,  the  warehouseman  may  sell  the  goods  at 
public  or  private  sale  without  advertising.  If  the  warehouseman 
after  a  reasonable  eflPort.  is  unable  to  sell  such  goods,  he  may  dis- 
pose of  them  in  any  lawful  manner,  and  shall  incur  no  liability 
by  reason  thereof. 

The  proceeds  of  any  sale  made  under  the  terms  of  this  section 
shall  be  disposed  of  in  the  same  way  as  the  proceeds  of  sales 
made  under  the  terms  of  the  preceding  section. 

(This  section  is  copied,  with  slight  changes,  from  Massachusetts 
Rev.  Laws.  e.  69  Sec.  9.) 

Sec.  35. —  [Other  Methods  of  Enforcing  Liens.]  The  remedy 
for  enforcing  a  lien  herein  provided  does  not  preclude  any  other 


.676 


20 

remedies  allowed  by  law  for  the  enforcement  of  a  lien  aprainst 
personal  property  nor  bar  the  right  to  recover  so  mu>:'h  of  the 
warehouseman 's  claim  as  shall  not  be  paid  by  the  proceeds  of  the 
sale  of  the  property. 

(It  did  not  seem  wise  in  view  of  the  wide  differences  in  pro- 
cedure between  some  of  the  States  to  make  the  method  of  enf  orce- 
■ing  a  lien  provided  by  Section  33  exclusive.) 

Sec.  36. —  [Effect  of  Sale.]  After  goods  have  been  lawfully 
sold  to  satisfy  a  warehouseman's  lien,  or  have  been  lawfully  sold 
or  disposed  of  because  of  their  perishable  or  hazardous  nature, 
the  warehouseman  shall  not  thereafter  be  liable  for  failure  to  de- 
liver the  goods  to  the  depositor  or  owner  of  the  goods,  or  to  a 
holder  of  the  receipt  given  for  the  goods  when  they  were  depos- 
ited, even  if  such  receipt  be  negotiable. 

This  section  necessarily  qualifies  the  right  of  a  purchaser  of 
a  negotiable  receipt.  Such  a  purchaser  may  ordinarily  assume 
that  if  the  document  was  issued  to  the  owner  of  goods  and  has 
been  duly  transferred  to  the  purchaser,  the  latter  will  get  a 
good  title,  but  this  assumption  must  be  qualified  by  the  chance 
referred  to  in  this  section.  The  age  of  the  receipt  will,  however, 
ordinarily  give  warning.  Moreover,  the  purchaser  of  the  receipt 
will  be  entitled  to  the  balance  of  the  proceeds  of  the  sale,  after 
satisfving  the  warehouseman. 


1677 


PART  III. 


Necjotiation  and  Transfer  of  Receipts. 

SecTiON  37. —  [Negotiation  of  Negotiable  Receipts  by  Delivery.] 
A  negotiable  receipt  may  be  negotiated  by  delivery — 

(a)  Where,  by  the  terms  of  the  receipt,  the  warehouseman 
undertakes  to  deliver  the  goods  to  the  bearer,  or 

(b)  Where,  by  the  terms  -of  the  receipt,  the  warehouseman 
undertakes  to  deliver  the  goods  to  the  order  of  a  specified  person, 
and  such  person  or  a  subsequent  indorsee  of  the  receipt  has  in- 
dorsed it  in  blank  or  to  bearer. 

(c)  Where,  by  the  terms  of  a  negotiable  receipt,  the  goods 
are  delivered  to  bearer,  or  where  a  negotiable  receipt  has  tjeen 
indorsed  in  blank  or  to  bearer,  any  holder  may  indorse  the  same 
to  himself  or  to  any  other  specified  person,  and  in  such  case  the 
receipt  shall  thereafter  be  negotiated  only  by  the  indorsement  of 
such  indorsee. 

(It  is  not  usual  for  warehouse  receipts  to  be  made  to  bearer, 
but  as  it  seems  clear  that  if  a  receipt  were  made  in  that  form 
it  should  be  negotiable  by  delivery,  it  seemed  wise  to  make  pro- 
vision for  the  case.  The  rule  as  to  restrictive  indorsement  is 
also  aimed  rather  to  cover  a  possible  contingency  than  a  usual 
practice.) 

Sec.  38. —  [Negotiation  of  Negotiable  Becetpts  by  Indorse- 
ment.'] A  negotiable  receipt  may  be  negotiated  by  the  indorse- 
ment of  the  person  to  whose  order  the  goods  are,  by  the  terms 
of  the  receipt,  deliverable.  Such  indorsement  may  be  in  blank, 
to  bearer  or  to  a  specified  person.  If  indorsed  to  a  specified  per- 
son, it  may  be  again  negotiated  by  the  indorsement  of  such  per- 
son in  blank,  to  bearer  or  to  another  specified  person.  Subsequent 
negotiation  may  be  made  in  like  manner. 

(This  section  applies  the  law  of  bills  and  notes,  as  it  is  in  fact 
applied  by  mercantile  custom  to  warehouse  receipts.) 

Sec.  39. —  [Transfer  of  Beceipts.]  A  receipt  which  is  not  Id 
such  form  that  it  can  be  negotiated  by  delivery  may  be  trans- 
ferred by  the  holder  by  delivery  to  a  purchaser  or  donee. 

A  non-negotiable  receipt  cannot  be  negotiated,  and  the  indorse- 
ment of  such  a  receipt  gives  the  transferee  no  additional  right. 


1678 

22 

I  The  tlm-i-  pret'fdiiiii'  sct'tions  follow  the  terminology  of  the 
Nejrotiable  Instniinents  Law  in  distiniruishino-  "nefrotiation" 
and  "transfer.''  Section  39  applies  not  only  to  the  transfer 
of  non-negotiable  receipts,  but  also  to  the  transfer  without  a 
necessary  indorsement  of  negotiable  receipts.) 
•  Sec.  40. —  [Who  may  Negotiate  a  Receipt.]  A  negotiable  re- 
ceipt may  be  negotiated — 

( a )     By  the  owner  thereof,  or 

(h)  By  any  person  to  whom  the  possession  or  custody  of  the 
receipt  has  been  entrusted  by  the  owner,  if,  by  the  terms  of  the 
receipt,  the  warehouseman  undertakes  to  deliver  the  goods  to 
the  order  of  the  person  to  whom  the  possession  or  custody  of 
the  receipt  has  been  entrusted,  or  if  at  the  time  of  such  entrusting 
the  receipt  is  in  such  form  that  it  may  be  negotiated  by  delivery 

(This  section  and  the  next  are  of  fundamental  importance  to 
the  mercantile  oommunity.  They  state  familiar  law  in  regard 
to  bills  and  notes  and  there  is  authority  for  them  in  the  statutes 
making  warehouse  receipts  and  bills  of  lading  negotiable  and  in 
well  recognized  mercantile  enstom.  Tt  will  be  noticed  that  <^ne 
who  takes  by  trespass  or  a  finder  is  not  included  within  the  de- 
scription of  those  who  may  nesfotiate.  To  this  extent  the  ware- 
house receipt  is  not  made  the  equal  of  the  bill  of  exchange  in 
negotiability.) 

Sec.  41. —  \ Rights  of  Persons  to  Whom  a  Receipt  has  heen  Ne- 
gotiated.]  A  person  to  whom  a  negotiable  receipt  has  been  duly 
negotiated   acquires  thereby — 

(a).  Such  title  to  the  croods  as  the  person  negotiating  the  re- 
ceipt to  him  had,  or  had  ability  to  convey  to  a  purchaser  in 
good  faith  for  value,  and  also  such  title  to  the  goods  as  the  de- 
positor or  person  to  whose  order  the  goods  were  to  be  delivered 
by  the  terms  of  the  receipt  had  or  had  ability  to  convey  to  a 
purchaser  in  good  faith  for  value,  and 

(?))  The  direct  obligation  of  the  warehouseman  to  hold  pos- 
session of  the  goods  for  him  according  to  the  terms  of  the  receipt 
as  fully  as  if  the  warehouseman  had  contracted  directly  with 
him. 

( This  section  follows  the  mercantile  theory  of  making  the  nego- 
tiable receipt  represent  not  simply  the  title  the  person  negotiating 
it  had.  but  also  whatever  property  the  depositor  had,  that  beinsr 
what  the  receipt  represented.  Many  States  already  have  statute-? 


1679 

23 

making  warehouse  receipts  negotiable.  Molum,  944;  but  these 
statutes  have  been  so  brief  that  they  have  been  variously  con- 
strued and  have  to  some  extent  failed  of  their  purpose.  See 
Shaw  vs.  Railroad  Co.,  101  U.  S.,  557;  Hurt's  Case,  99  Ala.,  140: 
Bank  vs.  Lee,  99  Ala.,  496.) 

Sec.  42. —  [Rights  of  Persons  to  Whom  a  Receipt  Has  Been 
Transferred.]  A  person  to  whom  a  receipt  has  been  transferred 
but  not  negotiated,  acquires  thereby,  as  against  the  transferor, 
the  title  to  the  goods,  subject  to  the  terms  of  any  agreement  with 
the  transferor. 

If  the  receipt  is  non-negotiable,  such  person  also  acquires  the 
right  to  notify  the  warehouseman  of  the  transfer  to  him  of  such 
receipt,  and  thereby  to  acquire  the  direct  obligation  of  the  ware- 
houseman to  hold  possession  of  the  goods  for  him  according  to 
the  terms  of  the  receipt. 

Prior  to  the  notification  of  the  warehouseman  by  the  trans- 
feror or  transferee  of  a  non-negotiable  receipt,  the  title  of  the 
transferee  to  the  goods  and  the  right  to  acquire  the  obligation 
of  the  warehouseman  may  be  defeated  by  the  levy  of  an  attach- 
ment or  execution  upon  the  goods  by  a  creditor  of  the  transferor 
or  by  a  notification  to  the  warehouseman  by  the  transferor  or  a 
subsequent  purchaser  from  the  transferor  of  a  subsequent  sale 
of  the  goods  by  the  transferor. 

(So  far  as  a  non-negotiable  receipt  is  concerned  this  states  the 
rights  at  common  law  of  any  purchaser  of  bailed  goods.  There- 
fore the  purchaser  gets  nothing  by  the  warehouse  receipt  except 
evidence.  In  the  case  of  a  negotiable  receipt  the  purchaser  nas 
the  further  right  given  by  the  next  section.) 

Sec.  43. —  [Transfer  of  Negotiable  Receipt  withont  Indorse- 
ment.] Where  a  negotiable  receipt  is  transferred  for  value  by 
delivery,  and  the  indorsement  of  the  transferor  is  essential  for 
negotiation,  the  transferee  acquires  a  right  against  the  transferor 
to  compel  him  to  indorse  the  receipt,  unless  a  contrary  intention 
appears.  The  negotiation  shall  take  effect  as  of  the  time  when 
the  indorsement  is  actually  made. 

( This  follows  the  analogy  of  bills  and  notes.  Crawford.  Xegot. 
Inst.  Law,  Sec.  79.) 

Sec.  44. —  [Warranties  on  Sale  of  Receipt.]  A  persan  who  for 
value  negotiates  or  transfers  a  receipt  by  indorsement  or  delivery, 
including  one  who  assisms  for  value  a  claim  secured  by  a  re- 
ceipt, unless  a  contrary  intention   appears,  warrants — 


1680 


24 


(a)  That  the  receipt  is  genuine. 

(b)  That  he  has  a  legal  right  to  negotiate  or  transfer  it. 

(c)  That  he  has  knowledge  of  no  fact  which  would  impair 
the  validity  or  worth  of  tlie  receipt,  and 

(d)  That  he  has  a  right  to  transfer  the  title  to  the  goods, 
and  that  the  goods  are  merchantable  or  tit  for  a  particular  pur- 
pose whenever  such  warranties  have  been  implied,  if  the  contract 
of  the  parties  had  been  to  transfer  without  a  receipt  the  goods 
represented  thereby. 

(This  section,  except  (d)  follows  the  Negotiable  Instruments 
LaM'.  Crawford.  Sec.  115.  (c?)  it  is  believed,  states  the  existing 
law.) 

Sec.  45. —  [Indorser  not  a  Guarantor.]  The  indorsement  of  a 
receipt  shall  not  make  the  indorser  liable  for  any  failure  on  the 
part  of  the  warehouseman  or  previous  indorsers  of  the  receipt  tx) 
fulfill  their  respective  obligations. 

(Mercantile  usage  in  regard  to  warehouse  receipts  differs  from 
that  in  regard  to  bills  and  notes  in  the  matter  to  which  this 
section  relates.  It  states  the  existing  law  even  where  statutes 
have  made  warehouse  receipts  and  bills  of  lading  negotiable. 
Shaw  vs.  Railroad  Co.,  101  U.  S..  557:  Mida  vs.  Geissmann, 
17  111.  App.,  207.) 

Sec.  46. —  [No  Warranty  Implied  from  Accepting  Payment  of 
a  Debt.]  A  mortgagee,  pledgee  or  holder  for  security  of  a  re- 
ceipt who  in  gfrM  faith  viemands  or  receives  payment  of  the 
debt  for  which  such  receipt  is  security,  whether  from  a  party 
to  a  draft  dra'wn  for  such  de'of  or  from  any  other  person,  shall 
not  by  so  doing  be  deemed  to  represent  or  to  warrant  the  gen- 
uineness of  such  receipt  or  the  ("uantity  or  quality  of  the  goods 
therein  described. 

(There  are  several  English  deu.sions  to  the  effect  that  the 
holder  of  a  bill  of  exchange  having  a  forged  bill  of  lading  as  se- 
curity is  not  liable  to  refund  pa^inent  of  the  draft  if  he  receives 
payment  from  the  drawee.  To  the  same  effect  are  liogman  vs. 
Bank,  12  Wall.,  181;  Goetz  vs.  Bank.  119  U.  S.,  551.  and  see 
Daniel  on  Neg.  Inst.,  §§  174,  175. 

In  Landa  vs.  Lattin,  19  Tex.  Civ.  App.,  246,  however,  without 
referring  to  these  authorities,  the  court  went  to  the  extreme 
length  of  holding  that  the  holder  of  a  bill  of  lading  taken  for 
securitv  on  the  discount  of  a  draft  succeeded  to  all  the  liablities 


1681 

of  his  transferor,  the  seller  of  the  goods,  and  was  to  be  regarded 
as  warranting  the  quality  of  the  goods  to  the  same  extent  as  the 
seller.  This  decision,  though  opposed  to  both  authority  and 
rea.son,  was  soon  followed  in  Finch  vs.  Greeg.  126  N.  C,  176, 
and  Searles  vs.  Smith  Grain  Co.,  80  ]Miss.,  688.  A  contrary  de- 
cision wa&,  however,  rendered  in  Tolerton  Stetson  Co.  vs.  Anglo- 
California  Bank.  112  la.,  706,  and  more  recently  Landa  vs.  Lat- 
tin,  has  been  overruled  in  its  own  State,  Blaidsell  Co.  vs.  Citizens' 
Nat.  Bank,  96  Tex.,  626,  but  has  nevertheless  been  subsequently 
followed  in  Alabama.  Though  these  decisions  all  relate  to  bills 
of  ladnig.  the  same  question  may  arise  as  to  warehouse  receipts, 
and  it  seemed  wise  to  provide  for  it.) 

Sec.  47. —  [Wlien  Negotiation  not  Impaired  bij  Fraud.  Mis- 
take or  Duress.]  The  validity  of  the  negotiation  of  a  receipt  is 
not  impaired  by  the  fact  that  such  negotiation  was  a  breach  of 
duty  on  the  part  of  the  person  making  the  negotiation,  or  by  the 
fact  that  the  owner  of  the  receipt  was  induced  by  fraud,  mistake 
or  duress  to  entrust  the  possession  or  custoy  of  the  receipt  to  such 
person,  if  the  person  to  whom  the  receipt  was  negotiated,  or  a 
person  to  whom  the  receipt  was  subsequently  negotiated,  paid 
value  therefor,  without  notice  of  the  breach  of  duty,  or  fraud, 
mistake  or  duress. 

(This  section  merely  elaborates  for  the  sake  of  clearness  certain 
cases  within  the  terms  of  Section  1:0.) 

Sec.  48.- — [Subsequent  Negotiation.]  Where  a  person  having 
sold,  mortgaged  or  pledged  goods  which  are  in  a  warehouse,  and 
for  which  a  negotiable  receipt  has  been  issued,  or  having  sold, 
mortgaged  or  pledged  the  negotiable  receipt  representing  such 
goods,  continues  in  possession  of  the  negotiable  receipt,  the  sub- 
sequent negotiation  thereof  by  that  person  under  any  sale,  or 
other  disposition  thereof,  to  any  person  receiving  the  same  in 
good  faith,  for  value  and  without  notice  of  the  previous  sale, 
mortgage  or  pleda'e.  shall  have  the  same  effect  as  if  the  first 
purchaser  of  the  goods  or  receipt  had  expressly  authorized  the 
subsequent  negotiation. 

This  is  copied  from  Section  25  (1)  of  the  Engli.sh  Sale  of 
Goods  Act-  where  it  applies  to  all  sales  of  goods.  It  is  of  especial 
importance  in  the  ease  of  negotiable  documents  of  title. 

Sec.  49. —  [Negotiation  Defeats  Vendor's  Lien.]  Wliere  a 
negotiable  receipt  has  been  issued  for  goods,  no  seller's  lien  or 


1682 


26 


ritrht  of  stoppatre  in  transitu  shall  defeat  tlie  rights  of  any  pur- 
chaser for  value  in  good  faith  to  whom  such  receipt  has  been 
negotiated,,  whether  such  negotiation  be  prior  or  subsequent  to 
the  notification  to  the  warehouseman  who  issued  such  receipt  of 
the  seller's  claim  to  a  lien  or  right  of  stoppage  in  transitu.  Nor 
shall  the  warehouseman  be  obliged  to  deliver  or  justified  in  de- 
livering the  goods  to  an  unpaid  seller  unless  the  receipt  is  first 
surrendered  for  cancellation. 

(This  perhaps  goes  beyond  the  existing  law.  ^NFe'chem  on  Sales, 
§  1507.  See,  however,  Newhall  vs.  Central  Pac.  R.  R.,  51  Cal., 
845.  The  protection  of  dealings  in  negotiable  receipts  clearly 
requires  that  a  vendor  who  has,  by  giving  up  possession  of 
goods  or  warehouse  receipts,  allowed  negotiable  receipts  to  be 
oustanding,  should  not  be  permitted  to  defeat  one  who  buys 
such  receipts.) 


1683 

It 


PART  IV. 


Criminal  Offenses. 

Sec.  50. —  [Issue  of  Receipt  for  Goods  not  Received.]  A  ware- 
houseman, or  any  officer,  agent  or  servant  of  a  warehouseman, 
who  issues  or  aids  in  issuino;  a  receipt,  knowing  that  the  goods  for 
which  such  receipt  is  issued  have  not  been  aotually  received  by 
such  warehouseman,  or  are  not  under  his  actual  control  at  the 
time  of  issuing  such  receipt,  shall  be  guilty  of  a  crime,  and  upon 
conviction  shall  be  punished  for  each  offense  by  imprisonment 
not  exeteding  five  years,  or  by  a  fine  not  exceeding  five  thousand 
dollars,  or  by  both. 

(To  insure  the  fundamental  luisis  on  which  the  value  of  nego- 
tiable receipts  must  rest  it  seemed  necessary  to  punish  criminally 
any  misrepresentation  or  fraud  in  regard  to  the  existence  of  the 
goods  behind  the  receipt.  Other  obvious  frauds  are  aimed  at 
by  the  following  five  sections.) 

Sec.  51. —  [Issue  of  Receipt  Containinej  False  Statement.]  A 
warehouseman,  or  any  officer,  agent  or  servant  of  a  warehouse- 
man, who  fraudulently  issues  or  aids  in  fraudulently  issuing 
a  receipt  for  goods  knowing  that  it  contains  any  false  statement, 
shall  be  guilty  of  a  crime,  and  upon  conviction  shall  be  pun- 
ished for  each  offense  by  imprisoimient  not  exceeding  one  year, 
or  by  a  fine  not  exceeding  one  thousand  dollars,  or  by  both. 

(See  note  to  Section  50.) 

Sec.  52. —  [Issue  of  Duplicate  Receipts  not  so  Marked.]  A 
warehouseman,  or  any  officer,  agent  or  servant  of  a  warehouse- 
man, who  issues  or  aids  in  issuing  a  duplicate  or  additional  ne- 
PTotiable  receipt  for  goods  knowing  that  a  former  negotiable  re- 
ceipt for  the  same  goods  or  any  part  of  them  is  outstanding  and 
uncancelled,  without  plainly  placing  upon  the  face  thereof  the 
word  "Duplicate,"  except  in  the  v^ase  of  a  lost  or  destroyed  re- 
ceipt after  proceedings  as  provided  for  in  Section  14,  shall  be 
guilty  of  a  crime,  and  upon  conviction  shall  be  punished  for 
each  offense  by  imprisonment  not  exceeding  five  years,  or  by 
a  fine  not  exceeding  five  thousand  dollars,  or  by  both. 

(See  note  to  Section  50.) 

Sec.  53. —  [Issue  for  WareJiousenian's  Goods  of  Receipts  which 
do  not  State  that  Fact.]     Where  there  are  deposited  with  or  held 


1684 

by  a  warehoiisenian  goods  of  which  he  is  owner,  either  solely  or 
jointly  or  in  connnon  with  others,  such  warehouseman,  or  any 
of  his  officers,  agents  or  servants  who.  knowing  this  ownership 
issues  or  aids  in  issuing  a  negotiable  receipt  for  such  goods 
which  does  not  state  such  ownership,  shall  be  guilty  of  a  crime, 
and  upon  conviction  shall  be  punished  for  each  ott'ense  by  im- 
prisonment not  exceeding  one  year,  or  by  a  fine  not  exceeding 
one  thousand  dollars,  or  by  both. 

(See  note  to  Section  50.) 

Sec.  54. —  [Delivery  of  Goods  without  Obtaining  Negotiable 
Receipt.]  A  warehouseman,  or  any  officer,  agent  or  servant  of 
a  warehouseman,  who  delivers  goods  out  of  the  possession  of  such 
warehouseman,  knowing  that  a  negotiable  receipt  the  negotiation 
of  which  would  transfer  the  right  to  the  possession  of  such 
goods  is  outstanding  and  uncancelled,  without  obtaining  lue 
possession  of  such  receipt  at  or  before  the  time  of  such  deliverj% 
shall,  except  in  the  cases  provided  for  in  Sections  14  and  36,  be 
found  guilty  of  a  crime,  and  upon  conviction  shall  be  punished 
for  each  offense  l\v  imprisonment  not  exceeding  one  year,  or  by 
a  fine  not  exceeding  one  thousand  dollars,  or  by  both. 

(See  note  to  Section  50.) 

Sec.  55. —  \ Negotiation  of  Receipt  for  Mortgaged  Goods.]  Any 
person  who  deposits  goods  to  which  he  has  not  title,  or  upon 
which  there  is  a  lien  or  mortgage,  and  who  takes  for  such  goods 
a  negotiable  receipt  which  he  afterwards  negotiates  for  value 
Avith  intent  to  deceive  and  without  disclosing  his  want  of  title 
or  the  existen'ee  of  a  lien  or  mortgage  shall  be  guilty  of  a  crime. 
and  upon  conviction  shall  be  punished  for  each  offense  by  im- 
prisonment not  exceeding  one  year,  or  by  a  fine  not  exceeding 
one  thousand  dollars,  or  by  both.  . 

(See  note  to  Section  50.) 


1685 


29 
PART  V. 


Interpretation. 

Sec.  56. —  [When  Rules  of  Cotumon  Law  Still  AppUcahle.]  In 
any  ease  not  provided  for  in  this  act,  the  rules  of  law  and  equity, 
including'  the  law  merchant,  and  in  particular  the  rules  relating 
to  the  law  of  principal  and  agent  and  to  the  effect  of  fraud,  mis- 
representation, duress  or  coercion,  mistake,  bankruptcy  or  other 
invalidating  cause,  shall  govern. 

(A  similar  provision  is  commonly  inserted  when  an  attempt 
is  made  to  reduce  to  statute  form  a  topic  of  the  law,  as  in  the 
Negotiable  Instruments  Law  or  the  Sale  of  Goods  Act.) 

Sec.  57.- —  [Interpretation  Shall  Give  Effect  to  Purpose  of  Uni- 
formity.] This  act  shall  be  so  interpreted  and  construed  as  to 
effectuate  its  general  purpose  to  make  uniform  the  law  of  those 
States  which  enact  it. 

(This  section  introduces  a  new  and  necessary  principle  of  con- 
struction. It  would  be  unfortunate  for  courts  of  each  State  to 
follow  the  general  rule  of  construing  the  law  with  reference  to 
previously  existing  rules  in  that  State — possibly  rules  peculiar 
to  that  State.  The  courts  should,  in  view  of  this  se'ction,  con- 
sider not  primarily  the  law  previously  existing  in  one  State, 
!)ut  in  the  States  generally.) 

Sec.  58. —  [Definitions.]  (1)  In  this  act,  unless  the  context 
or  subject  matter  otherwise  requires — 

"Action'"  includes  counter  claim,  set-off  and  suit  in  equity. 

"Delivery"  means  voluntary  transfer  of  possession  from  one 
person  to  another. 

"Fungible  goods"  means  goods  of  which  any  unit  is,  from  its 
nature  or  by  mercantile  custom,  treated  as  the  equivalent  of  any 
other  unit. 

"Goods"  means  chattels  or  merchandise  in  storage,  or  which 
has  been  or  is  about  to  be  stored. 

"Holder"  of  a  receipt  means  a  person  who  has  both  actual 
possession  of  such  receipt  and  a  right  of  property  therein. 

"Order"  means  an  order  by  indorsement  on  the  receipt. 

"Owner"  does  not  include  mortgagee  or  pledgee. 

"Person"  includes  a  corporation  or  partnership  or  two  or 
more  persons  having  a  .joint  or  common  interest. 


1686 


:{() 


T(i  "purchase"  includes  to  take  as  inorttjasree  or  as  pledjree. 

"Purchaser''  includes  mortgagree  and  pledgee. 

"Receipt"  means  a  warehouse  receijit. 

"Value"  is  any  consideration  sufficient  to  support  a  simi)k' 
contract.  An  antecedent  or  pre-existing  obligation,  whether  for 
money  or  not,  constitutes  value  where  a  receipt  is  taken  either 
in  satisfaction  thereof  or  as  security  therefor. 

"Warehouseman"  means  a  person  lawfully  engaged  in  the 
business  of  storing  goods  for  profit. 

(2)  A  thing  is  done  "in  good  faith"  within  the  meaning 
of  this  act,  when  it  is  in  fact  done  honestly,  whether  it  be  done 
negligently  or  not. 

(The  only  one  of  these  definitions  requiring  comment  is  that 
of  value,  which  follows  the  Negotiable  Instruments  Law  and  ap- 
plies the  rule  generally  prevailing  in  regard  to  bills  and  notes 
to  warehouse  receipts.) 

Sec.  59. —  [Act  Does  not  Apply  to  Existing  Receipts.]  The 
provisions  of  this  act  do  not  apply  to  receipts  made  and  delivered 
prior  to  the  taking  effect  of  this  act. 

Sec.  60.— \Inco)tsistent  Legislation  Repealed.]  All  acts  or 
parts  of  acts  inconsistent  with  this  act  are  hereby  repealed. 

Sec.  %l.—  \Time  ^\licn  the  Art  Takes  Effect.]  This  act  shall 
take  eiic^t  o'^  the  day  of  .  one  thousand  nine 

hundred  and 

Sec.  62. —  ^  Xante  of  Act.]  This  act  may  be  cited  as  the  Ware- 
house Rectijits  Act. 

We  trust  that  your  message  may  recommend  the  law  for  pass- 
age, and  we  have  caused  it  to  l)e  introduced  at  the  present  ses- 
sion of  thc'  I  euislatui'e,  and  will  assist  in  every  way  we  can  to  se- 
(Mii'c  its  final  adoption.  Tn  this  connection,  we  beg  to  quote  a  few 
words  froni  an  address  delivered  by  one  of  the  Commissioners 
from  this  State  before  the  IMississippi  Bar  Association  at  tht 
Second  Annual  Session,  in  ^lay.  1907 : 

"Pealine  in  warehouse  receipts  is,  as  we  all  know, 
s-rowing  laryrer  every  day,  and  to  the  States  like  yours 
(^li.ssissippi),  and  mine  (Louisiana),  where  our  wealth 
is  in  aizricultural  products,  the  warehouse  is  as 
necessary  to  the  realization  of  that  wealth  almost 
as  the  ground  from  which  the  wealth  springs.  The 
very      moment      that    the    law    becomes    certain     and 


1687 


:^i 


imiform    as    to    warehouse  receipts,   that    moment    is 
an  added  value  given  to  agricultural  products.     With 
the  elements  of  risk  eliminated  or  reduced  to  a  mini- 
mum, higher  prices  will  be  paid  than  otherwise,  and 
when  a  banker,  no  matter  where  he  resides,  may  deal 
with  a  warehouse  receipt,  no  matter  where  the  ware- 
house  is,   with   almost   absolute   certainty   of   the  law, 
dealing  will  increase,  there  will  be  more  competition, 
and  prices  will  advance.     The  quantity  of  agricultural 
products  raised  and  sold  in  the  South  and  West  is  so 
great  that  almost  the  smallest  fraction  of  increase  in 
price  brings  enormous  wealth,  and  that  increase  in  price 
is  sure  to  come  with  that  confidence  which  certainty  of 
rights  and  obligations  brings.     I  await  with  impatience 
the  next  session  of  our  Legislature,  so  that  I  may  bring- 
before  it,  I  hope  with  the  assistance  of  our  entire  bar 
and  commercial  community,  this  Negotiable  Warehouse 
Receipts  Law,  and  I  shall  work  with  my  best  efforts  to 
secure  its  passage;  and  I  hope  that  in  Mississippi  and 
other  States  the  same  efforts  will  be  made,  and  all  be 
successful.     There  are  no  radical  changes  from  the  gen- 
eral law  in  this  warehouse  receipts  bill,  nor  were  there 
any  in  the  Negotiable  Instruments  Bill.     The  draughts- 
men of  each  bill  took  the  law  as  interpreted  where  there 
was  no  conflict,  and  where  there  was  a  conflict,  followed 
the  weight  of  authority,  unless  same  seemed  opposed  to 
the    best-   principles    of  substantive    law.     As    we    all 
know,  a  great  part  of  the  law  on  any  given  subject  is 
jurisprudence,  and  the  best  jurisprudence  has  been  en- 
acted into  positive  statute  in  these  two  bills." 
At  the  coming  session  there  will  be  discussed  drafts  of  acts 
for  uniform  laws  on  Bills  of  Lading,  Transfer  of  Stock  in  Pri- 
vate  Corporations  and    Partnership.      The   last   named   act   was 
prepared  by  Prof.  James  Barr  Ames,  dean  of  the  Harvard  Law 
School,  who  adopted  the  Louisiana  idea  of  partnership,  that  it 
is  an  "entity  distinct  from  the  persons  who  compose  it,"  and 
opposed  to  the  common  law  rule  which  considers  the  partnership 
simply  as   an   aggregation   of  individuals,   and  the   rights  and 
obligations  of  the  partnership  considered  only  through  the  in- 
divduals.     It  is  expected  that  all  of  these  laws  will  be  finally 


1688 

approved  at  the  coiniiii:-  eoiifereuce,  and  reconnneiided  for  adop- 
tion by  the  conference  to  the  States. 

We  also  deem  it  proper  to  make  part  of  our  report  the  follow- 
ing report  on  the  "Torrens  System,"  approved  at  the  last  con- 
ference : 

Portland,  Me.,  August  22,  1907. 
To  the  Conference  of  Commissioners  on  Uniform  State 
Laws : 
Your  undersiuned  committee  on  the  Torrens  System 
beg  to  rej)ort  as  follows  : 

That  Louisiana  passed  in  1904  an  act  known  as  No. 
88  of  the  legislative  session  of  that  year,  reading : 

"AN  ACT 

"To  investigate  the  Torrens  System  of  Land  Registra- 
tion, to  appoint  a  commission  for  that  purpose,  and 
to  provide  for  a  report  thereof, 

"Section  1.  Be  it  enacted  by  the  General  Assembly 
of  the  State  of  Louisiana,  That  the  Qovernor  be,  and  he 
is  hereby,  authorized  to  appoint  a  commission,  consisting 
of  four  members  of  the  bar  and  one  of  the  Justices 
of  the  Supreme  Court,  who  shall  be  chairman  of  said 
board,  for  the  purpose  of  investigating  what  is  known 
as  the  Torrens  System  of  Land  Registration. 

"That  said  commission  shall  report  to  the  Governor 
within  twelve  months  from  the  date  of  its  appointment, 
and  the  Governor  shall  transmit  said  report,  -with  his 
recommendations  and  with  such  other  information  as 
he  may  desire,  to  the  general  Assembly  at  its  next 
session. 

"Sec.  2.  Be  it  further  enacted,  etc.,  That  said  com- 
mission shall  serve  entirely  without  compensation,  but 
the  simi  of  one  hundred  dollars  be,  and  the  same  is 
hereby,  appropriated  for  the  actual  expenses  of  said 
commission,  including  the  printing  of  its  report,  same  to 
be  paid  upon  the  warrant  of  the  chairman  of  the  board." 

That,  accordingly,  the  Governor  appointed  a  commis- 
sion, consisting  of  ^Fr.  Justice  0.  0.  Provosty,  of  the 
Supreme  Court  of  Louisiana  -.  Mr.  T.  J.  Kernan.  of 
Baton  Rouge,  La.,  a  member  of  th*^  State  House  of 
Representatives;  Islr.  "W.  ]\I.  ^Murphy,  of  ]\radison  Parish. 


.  1689 

33 

Louisiana,  a  member  of  the  State  Senate ;  Mr.  Solomon 
Wolft'  and  Mr.  W.  O.  Hart,  members  of  the  bar  of 
New  Orleans. 

Bills  to  carry  out  the  object  of  the  act  were  prepared 
by  Mr.  Wolff,  Mr.  Justice  Provosty  and  Mr.  Hart,  and 
finally,  at  a  meeting  of  the  commission,  all  were  referred 
to  Mr.  Kernan,  who  drew  up  a  new  bill,  mainly  on  the 
lines  of  the  one  prepared  by  Mr.  Justice  Provosty. 

Mr.  Kernan  was  charged  with  the  introduction  of 
the  bill  in  the  Legislature  at  the  session  of  1906,  but 
there  was  so  much  opposition  to  the  bill  at  the  time  that 
it  was  felt  by  the  Commission  that  it  was  not  the  proper 
time  to  press  the  measure,  thinking  it  best  to  educate 
the  people  first  up  to  the  merits  of  the  system. 

At  the  annual  convention  of  the  United  States  League 
of  Local  Building  and  Loan  Associations,  held  at  Chi- 
cago, 111.,  July  24  and  25,  1907,  with  almost  every  State 
represented,  after  considerable  discussion  on  the  merits 
of  the  Torrens  System,  in  which  IMr.  Hart  joined,  this 
resolution  was  unanimously  adopted: 

' '  Resolved,  That,  as  a  remedy  for  the  uncertainty  and 
annoying  complexity  of  the  old  system  of  recording 
land  titles,  the  Torrens  System,  or  some  other  method 
of  similar  character  in  harmony  with  our  constitutional 
requirements,  be  recommended  for  adoption  by  the 
Legislatures  of  the  several  States." 

This  committee  believes  that  the  adoption  of  this  reso-    , 
lution  will   go  a  long  w^ay  towards  popularizing    the 
Torrens  System. 

The  State  of  New  York,  at  its  session  of  1907,  adopted 
a  law  on  the  subject,  as  follows : 

' '  Chapter  658. 
"An  Act  to  provide  for  the  appointment  of  a  connnis- 
sion  to  investigate  the  Torrens  System  of  registering 

land  titles,  and  to  report  on  the  expediency  of  the 

adoption  of  such  system  by  the  State  of  New  York. 

"Became  a  law  June  19,  1907,  with  the  approval  of  the 

Governor.       Passed,  three-fifths  being  present. 

''The  People  of  the  State  of  New  Yorl-,  represented  in. 
Senate  and  Assemhly,  do  ennct  as  follows: 


1690 

34 

"Section  1.  The  Governor  is  hereby  authorized  to 
appoint,  -within  thirty  days  after  this  act  shall  take 
effect,  a  commission  of  seven  citizens  of  the  State,  of 
whom  at  least  three  shall  be  lawyers,  to  examine  the 
system  of  registration  of  land  titles  known  as  the  Tor- 
rens  System,  and  to  report  on  the  expediency  of  the 
establishment  of  such  system  by  the  State  of  New  York. 

"Sec.  2.  The  commission  shall  have  the  power  to  sub- 
poena witnesses,  take  testimony  and  compel  the  produc- 
tion before  it  of  books,  papers,  documents,  records  and 
maps.  Every  person,  public  official  and  employe  is  here- 
by directed,  for  the  purpose  of  carrying  out  the  provis- 
ions of  this  act,  to  furnish  to  the  commission,  or  its 
representatives,  free  access  at  all  reasonable  times  to 
such  books,  papers,  documents,  records  or  maps  and 
information  as  may  be  in  their  possession  or  under 
their  control. 

"Sec.  3.  The  commission  shall  communicate  or  con- 
fer with  the  authorities  of  such  States  of  the  United 
States  and  such  otlier  countries  as  have  adopted  the  so- 
called  Torrens  System  of  registering  land  titles,  or  modi- 
fications of  such  system,  and  examine  the  operation  and 
effect  of  such  systems  in  those  States,  and  shall  inves- 
tigate the  nature  and  condition  of  real  estate  titles 
in  this  State,  and  make  sueh  other  investigations  as 
it  may  deem  advisable,  and  shall  consider  the  expediency 
of  the  adoption  by  the  State  of  New  York  of  the  so- 
called  Torrens  System  of  registering  land  titles,  or  any 
modification  thereof.  If  the  commission  shall  recom- 
mend the  adoption  by  this  State  of  such  a  system,  it 
shall  draft  such  bill  or  bills  as  may  be  necessary  to 
establish  such  system  and  carry  the  recommendations 
of  the  commission  into  effect. 

"Sec.  4.  The  commission  shall  report  to  the  Legisla- 
ture on  or  before  the  first  day  of  February,  nineteen 
hundred  and  eight,  accompanying  its  report  with  drafts 
of  such  bills  as  may  be  necessary  to  carry  its  recommen- 
dations into  effect.  Upon  making  such  report,  the 
terms  of  office  of  the  members  of  this  commission  shall 
expire. 


1691 


85 


"Sec.  5.  This  act  shall  take  effect  immediately." 
Your  committee  believe  that,  if  each  State  would  in- 
vestigate this  subject,  in  the  end  they  would  all  adopt  it, 
and,  therefore,  they  recommend  to  each  State  the  adop- 
tion of  a  law  such  as  was  adopted  in  Louisiana  or  in 
New  York. 

"Respectfully  submitted, 

"W.  0.  Hart,  Chairman, 
"C.  T.  Terry, 
"E.  P.  Arvine.'' 
IMany  of  the   States  contribute  to  the  expenses  of  the  con- 
ference.      Our  State  has  not  yet  done  so,  but  except  for  the 
first  year,   has  made   appropriations  which  have  paid  part  of 
the  expenses  of  the  commissioners. 

Respectfully  submitted, 

T.  J.  KERNAN,  Chairman, 
J.  R.  THORNTON, 
W.  0.  HART,  Secretary. 


UC  SOUTHERN  REGIONAL  LIBRARY  FACIL 


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